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		</div><p><a href="http://londonglossy.com/wp-content/uploads/2011/02/air-france-warning-sparks-slump.jpg"><img class="alignnone size-full" title="The newly-formed parent of British Airways, International Consolidated Airlines Group, has seen shares fall" src="http://londonglossy.com/wp-content/uploads/2011/02/min-air-france-warning-sparks-slump.jpg" alt="The newly-formed parent of British Airways, International Consolidated Airlines Group, has seen shares fall"/></a></p>
<p>The newly-formed parent of British Airways has seen shares slide as the air travel industry digested a profits warning from one of its major players.</p>
<p>International Consolidated Airlines Group (IAG), formed last month when BA merged with Spanish carrier Iberia, suffered as Air France-KLM said its full-year earnings would come in below the forecast 300 million euros (£250 million).</p>
<p>The carrier, formed when Air France merged with Dutch airline KLM in 2004, said air traffic control strikes in France and heavy snowfall across Europe had hit its third-quarter sales, while adverse weather in the US and political turmoil in North Africa are expected to further dampen trade.</p>
<p>The warning spooked investors&#8217; confidence in the industry, as Flybe and easyJet tumbled with IAG, just weeks after British airlines revealed the negative impact December&#8217;s weather had on their own profits.</p>
<p>British Airways estimated the disruption caused by heavy snowfall and freezing temperatures cost the airline £50 million, while easyJet took a £31 million hit and Flybe lost £6 million.</p>
<p>IAG shares have dropped around 16% since the company was listed on the London Stock Exchange last month as fears mount over rising jet-fuel prices.</p>
<p>Andrew Fitchie, analyst at brokers Investec, said fears over fuel prices were offsetting the advantages of the BA/Iberia Merger. He said: &#8220;Given the uncertain economic backdrop, we are cautious on airlines&#8217; ability to recover fuel cost increases through surcharges.&#8221;</p>
<p>The BA-Iberia merger was expected to help the airlines save 400 million euros (£337.3 million) a year by its fifth year.</p>
<p>Together, Iberia and British Airways fly to more than 200 destinations on more than 400 aircraft. Last year they carried 55 million passengers.</p>
<p>Air France-KLM posted a net third-quarter loss of 46 million euros (£39 million) between October and December, a period in which it was forced to cancel 6,900 flights. This follows a 241 million euro loss (£204 million) a year earlier. The carrier also said it will pay more for aviation fuel in the fourth quarter than previously forecast. It expects to pay 1.96 billion US dollars (£1.22 billion) for fuel between January and March.</p>
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